If you are a salaried employee in California, New York or Maine who is treated as exempt from the overtime pay requirements [i.e. you do not get paid overtime], you should make sure that your salary actually meets the minimum amount required by state law to qualify for the exemption to the overtime rules. If not, you may be the victim of wage theft and entitled to back overtime pay (potentially doubled).
While federal wage law has recently increased the salary threshold for the white-collar exemptions from overtime pay from $23,660 to $35,568 as of Jan. 1, 2020, employers in California, New York and Maine must comply with higher state levels.
Employers must pay whichever salary threshold is greater – federal or state
What is the minimum California Salary for Exempt Employees?
In California, the minimum salary required for the executive, administrative and professional exemptions is double the state minimum wage. So, when the minimum wage goes up so does the exempt salary threshold. California’s minimum salary for 2019 is $49,920 (annualized) for businesses with at least 26 employees and $45,760 for those with fewer, and will increase to $54,080 and $49,920, respectively, as of Jan. 1, 2020.
For individuals to qualify as exempt employees, California labor law requires that:
- They perform exempt duties more than 50% of their work time, and
- Exempt executive, administrative, and professional employees earn a salary of no less than two times the state minimum wage for full-time employment. The minimum annual salary is based on the current state minimum wage, calculated as follows: minimum wage x 2 x 2080 hours.
Applying the formula, as of January 1, 2020, the minimum salary threshold for these exemptions is:
- $54,080 per year (or $1,040 per week) for employers of 26 or more employees
- $49,920 per year (or $960 per week) for employers of 25 or fewer employees
Note that California’s increased minimum wage will also impact commissioned inside salespeople. Under California law, commissioned inside salespeople are exempted from the state’s overtime laws if the employee earns more than 1.5 times the state minimum wage and more than half of the employee’s compensation represents commission earnings. So, in order to maintain their exempt status, commissioned inside salespeople will need to earn more than $19.50 per hour (26 or more employees) or $18.00 per hour (1-25 employees).
What is the minimum New York Salary for Exempt Employees?
The New York state minimum salary threshold for executive and administrative employees has been increasing each year, with the applicable rate varying based on job location and the number of employees. For example, the minimum annual salary for 2019 was $58,500 ($1,125 per week) for employees who work in New York City for large employers (11+ employees) and fast-food restaurants and $52,650 for workers at other businesses with 10 or fewer employees. In Long Island and Westchester, the threshold was $46,800, and in the remainder of the state $43,264.
As of 2020, businesses with 10 or fewer employees will need to pay exempt workers in New York City at least $58,500 ($1,125 per week). The cutoff in Nassau, Suffolk and Westchester counties will increase to $50,700 and the threshold in other areas of the state will be raised to $46,020.
What is the minimum Maine Salary for Exempt Employees?
The minimum annual salary for exempt workers in Maine is an amount that is at least 3,000 times the state minimum wage. As of 2020, that puts the minimum salary required under ME state law at $36,000 per year, which is higher than $35,568 per year, the amount required by federal law beginning in 2020 (federal law minimum salary increased to $684 as of 1/1/20).
Maine employers will need to comply with the higher state threshold in 2020, as employers must comply with the law that provides the most compensation to the employee
What to Do If You Have Not Been Paid The Minimum Salary Required by Law
If you have worked a job that requires you to work overtime but have not been paid at least time and one-half because you were classified as salaried exempt, even though your salary was below the minimum amount required by law, there is a good chance that you and your coworkers could be owed significant compensation for the underpayment and late payment of overtime wages.
If you have questions or believe that you have been the victim of wage theft contact us for a free and confidential review of your situation.